Some organisations are reportedly using artificial intelligence to provide financial advice. The Association of Mortgage Intermediaries (AMI) has questioned whether these so-called robo advisers provide reliable advice.

In January 2018 an initiative known as Open Banking will be launched. Eight of the UK’s largest banks and the Nationwide Building Society will share data. Price comparison websites will be able to access this data and use it to provide advice for people looking for private or commercial mortgages. The AMI fears that if the robo advisers rely solely on Open Banking they cannot truly compare the whole of the market.

Mortgage advisers have to be qualified and regulated so that their advice is informed and in their client’s best interests. The AMI has questioned whether the advice given by robo advisers constitutes regulated advice. Robo advisers use automated decision trees and provide advice based on fixed algorithms.

Human advisers are more flexible and can also deal with vulnerable people who may have disabilities or mental health issues that robo adviser cannot adapt to. The Mortgage Market Review stresses that financial advice needs to be available to everyone, which the robo adviser cannot do.

Financial services technology could rapidly develop in the near future, but robo advisers may not be able to understand the market dynamics as well as a regulated mortgage adviser. A mortgage broker has access to a wide number of lenders in order to find the best mortgage deals for their clients. Robo advisers could limit borrower’s choices.